Cabinet Committee Probing Pharmaniaga Monopoly

By CodeBlue | 03 April 2019

Pharmaniaga’s shares fell this afternoon.

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KUALA LUMPUR, April 3 — A Cabinet committee on monopolies is investigating local pharmaceutical group Pharmaniaga Berhad that exclusively procured certain drugs for the government for 25 years, minister Saifuddin Nasution Ismail said today.

The Edge reported the domestic trade and consumer affairs minister as saying that the committee, which is also scrutinising Padiberas Nasional Bhd (Bernas), Puspakom Sdn Bhd, and My E.G Services Bhd, has yet to submit its recommendations to the Cabinet.

“Monopolies are not necessarily bad, but the ones that are bad are those that are inhibiting their competitors, manipulating prices and controlling supply,” Saifuddin was quoted telling reporters here today.

He reportedly cited three factors in assessing monopolies — whether policies allowing these monopolies to be set up were still relevant, their investment size, and the economic impact of possibly dismantling them.

The Cabinet committee on monopolies is chaired by Economic Affairs Minister Azmin Ali and comprises Saifuddin, Health Minister Dzulkefly Ahmad, Transport Minister Anthony Loke, and Agriculture and Agro-based Industry Minister Salahuddin Ayub.

The Edge reported that Pharmaniaga’s shares fell after news reports about the Cabinet committee’s investigation, losing 7 sen or 3.14 percent to RM2.16 this afternoon.

Pharmaniaga is the biggest Bumiputera tender agent in the country with exclusive concession to supply 700 items in the Approved Product Purchase List (APPL), determined by the Ministry of Health (MOH), to government hospitals, institutions, and clinics. This, according to the Galen Centre for Health and Social Policy, comprises over a third of the government’s drug supply.

The company received sole concession for a quarter of a century since Putrajaya privatised the medicine procurement system in 1994.

Pharmaniaga’s concession provides distribution and logistics services for the products procured under the APPL. According to the Malaysia Competition Commission (MyCC), Pharmaniaga supplied 38.5 per cent of the total cost of medicines procured for all MOH hospitals, institutions and clinics in 2015.

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